Ghana scores 62% for finance in agriculture – EBA Report

hana has a score of 62.43 for finance, above the global average of 50.97, in the 2017 ‘Enabling the Business in Agriculture (EBA) report’. Of 62 countries assessed globally, Ghana ranked 16th.

EBA focuses on legal and regulatory barriers for businesses that operate in agriculture in 62 countries and across 12 topics, including seed, fertilizer, machinery, finance, markets, transport, water, information and communication technology (ICT), environmental sustainability, gender, land and livestock.

The country showed strengths in regulations for branchless banking and non-bank lending institutions.

The report identified some good financial practices related to non-bank lending institutions, where both microfinance institutions (MFIs) and financial cooperatives are required to provide clear information on the full cost of credit.

When it comes to branchless banking, agents can offer a wide range of services such as cash-in, cash-out, bill payment, and transfers.

It further identifies the minimum licensing standards and qualifications for non-financial institutions to issue e-money, as well as regulations requiring e-money issuers to safeguard customer funds, as some good financial practices enhancing agriculture.

However, there are areas that can improved related to moveable collateral, specifically in the warehousing receipt system.

Speaking to Goldstreet Business, the programme coordinator of EBA, of the Global Engagement Unit of the World Bank’s Agriculture Global Practice, Farbod Youssefi said, effective financial inclusion requires several different conditions, amongst which good laws and regulations are key.

However, Youssefi mentioned that there are other conditions too, such as robust institutions and effective interest rates, among others.

“The fact that performance is weak, can point to the fact that other elements have to be examined,” he said.

Youssefi indicated that, one component in enabling the environment for agribusiness is a strong legal regulatory framework. There are certain areas within that framework, where improvement could be made in Ghana. He suggested that, there could be greater efficiency of some of the regulatory and registration processes in agriculture.

The EBA 2017 aims to foster a more conducive environment for agribusiness. By providing key data on regulatory frameworks that are globally comparable and actionable, it strengthens the information base that can be used for policy dialogue and reform. Such efforts can stimulate private sector activity and lead to more efficient and effective agricultural value chains.

EBA’s dataset features two types of indicators, that is; Legal indicators primarily reflect the text of laws and regulations and assess their conformity with a number of global regulatory good practices. Efficiency indicators measure the transaction costs that firms have to bear to comply with national regulations on the ground.